NOTE 3 - ACQUISITIONS, GOODWILL AND INTANGIBLE ASSETS

Goodwill from 2019 Reverse Merger with Oncotelic and Merger with PointR

The Company completed the reverse merger with Oncotelic Inc. (“Merger”) in April 2019. The Company completed the merger with PointR Data Inc (“PointR Merger”) in November 2019. For more details on the two mergers, refer to our 2020 Annual Report on Form 10-K for the year ended December 31, 2020 filed by the Company on April 15, 2021.

The Oncotelic merger gave rise to Goodwill of approximately $4.9 million. Upon the non-financial sale of our asset as contribution to our equity method investment, we derecognized the balance of the carrying value of our goodwill of approximately $4.9 million from the Oncotelic Merger in accordance with our policy and authoritative accounting guidance.

Further, we added goodwill of approximately $16.2 million upon the completion of the Merger with PointR. Between the years 2022 and 2024, we recorded impairments of approximately $13.4 million, as we observed our market capitalization being negatively impacted as compared to the book value of our net assets.

We have one operating segment and reporting unit. Accordingly, our review of goodwill impairment indicators was performed at the entity-wide level. In performing our annual impairment assessment, we determined if we should qualitatively assess whether it was more likely than not the fair value of goodwill was less than its carrying amount (the qualitative impairment test). The factors we considered in the assessment included our market capitalization, general macroeconomic conditions, conditions specific to the industry and market and whether there had been sustained declines in our share price. If we concluded, it was more likely than not, the fair value of the reporting unit was less than its carrying amount, or elected not to use the qualitative impairment test, a quantitative impairment test would be performed.

We have used our market capitalization as an indicator of fair value. While we believe the fair value measurement need not be based solely on the quoted market price of an individual share of our Common Stock, and that we also could consider the impact of a control premium in measuring the fair value of its reporting unit. In the absence of any other valuation metrics, the Company believed using a control premium utilized would not be appropriate under the current circumstances. We also considered some other market comparables’ trends in our stock price as well as the industry over a period of two successive quarters and prospective quarter to evaluate whether the fair value of our reporting unit was greater than our carrying amount. No impairment to goodwill was required to be recorded for the year ended December 31, 2025. The Company evaluated if it needed to record any goodwill impairment as of June 30, 2026, based solely on the market capitalization of the Company and concluded that no impairment was required to be recorded for the three and six months ended June 30, 2026.

A summary of our goodwill as of June 30, 2026, and December 31, 2025, is shown below:

SCHEDULE OF GOODWILL 

Goodwill is tested for impairment annually as of December 31, or more frequently if events or changes in circumstances, such as a sustained decline in our market capitalization, indicate that it is more likely than not that the fair value of a reporting unit is below its carrying amount. If an interim evaluation indicates that an impairment exists, a quantitative test is performed, and any resulting impairment loss is recognized in the period identified

In-Process Research & Development (“IPR&D”) Summary

The IPR&D assets were acquired in the PointR Merger during the year ended December 31, 2019. Since January 2021, the Company has determined that the IPR&D should be reported as an indefinitely lived asset and therefore will evaluate, on an annual basis, for any impairment on the IPR&D and will record an impairment if identified. The balance of IPR&D as of June 30, 2026 and December 31, 2025, respectively, was $1,101,760. For more information on the IPR&D, please refer to our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026. The Company did not record any impairment as of June 30, 2026 and December 31, 2025.